Restaurants still padding the bill with illegal charges

Non-tourist restaurants are continuing to add service charges to bills despite government calls for diners to report fees that break the law.

Non-tourist restaurants are continuing to add service charges to bills despite government calls for diners to report the illegal fees. This week the Ministry of Economy confirmed that it was illegal for non-tourist restaurants to add service charges. Failing a ministerial decree, however, several establishments are continuing to add five to 20 per cent to the price of the food.

At the Noodle House in Al Wahda Mall in Abu Dhabi yesterday, for example, management offered a discount to offset the service fee when asked. A manager said the restaurant was aware that the legality of adding a 10 per cent surcharge was in question. But the head office of the franchise instructed the restaurant to continue charging the fee until it was ordered to remove it. It said the restaurant had a tourist license even though it was inside a mall.

The Art Cafe in Mall of the Emirates in Dubai, which adds a 10 per cent service charge to each bill, has been inundated with complaints. While staff are awaiting advice from their headquarters, they have been instructed to cancel the charge on the bill if anyone objects. "We are still charging 10 per cent at the moment but have reported the matter to our central office," said Aseb Hermansyah, the manager. "We have been getting a lot of complaints."

Under the law, only restaurants intended to cater to tourists, such as those in hotels and private clubs, may add a service and tourist fee, which usually adds up to 16 per cent. At least five per cent of the service fee must go directly to staff. At Fuddruckers in Al Wahda Mall in the capital, staff did not remove the service charge when asked. They were aware of the minister's declaration, they said, but had been told by their bosses to keep the fee in place until the Government instructed them otherwise.

At Chili's at Al Mariah Cinema in Dubai, a manager offered a discount equal to the service charge but said the restaurant could not deduct the charge altogether because it was programmed into the computer system. All of the restaurants visited were aware of the furore surrounding the charges after the ministry said it would respond to complaints from customers. Mafaz Mohideen, a 25-year-old mechanical engineer from Sri Lanka, said he believed service charges were simply a ruse to increase profits.

"I think service charges were initially used as a replacement for tips," he said, "so that restaurants could keep track of how much their servers were tipped. In my opinion, they don't actually go to the people whom they were intended for any more. Over the years though, this concept has been eroded, and I think restaurants just increase their earnings with the service charge." Mr Mohideen said, however, that he would not refuse to pay if the charge were added to his bill. "I go to a restaurant to have a nice time and I would rather pay the minimal amount than argue with the management," he said.

Not all restaurants are against the ruling. Khalil al Hariri, a manager at the Lebanese Flower restaurant in Abu Dhabi, said his establishment did not add the charge. "It is a new charge that restaurants are adding," he said. "Customers should not be obliged to pay it. It's not part of the price of the food." After clarifying the illegality of service fees, the Government then called upon consumers to refuse to pay the charges and to file complaints to the Department of Economic Development, which licenses restaurants.

Service charges are common in other parts of the world, but are usually paid to staff. Anne Hourcade, 29, a teacher from France, thought it would help if outlets simply mentioned on the menu that service charges were included in the prices. "That way, I would know the price of the food because sometimes the bill is higher than I expect it to be when the service charge is included at the end," she said. "In France, the menu mentions that five per cent of the price is for service and this is paid directly to the waiters. It should be like that over here."

She also stressed that the money should go entirely to the servers and cooks, and that Government should strictly enforce this. Other customers said they believed service charges would detract from tips, pushing more money into the hands of managers and owners, rather than employees. Fahd Alshmi, 24, an Emirati employed in the management section of a petroleum company, said he did not feel the service charge should be included.

"I pay for the food I eat, and for the service," he said. "Anyway, I don't think the extra amount goes to the waiters. Waiters get their salaries, and are not paid the service charges." He also said he would give more money in tips in the absence of a mandatory service charge. * With additional reporting by Samihah Zaman